Germany blocks complete takeover of satellite startup by Chinese firm

According to two government officials who spoke to Reuters on Wednesday, the German authorities prohibited a Chinese company from fully acquiring satellite startup KLEO Connect.

According to the sources, the cabinet approved a resolution by the economy ministry to prevent Shanghai Spacecom Satellite Technology, which already owns 53% of the business, from acquiring the 45% minority ownership held by the German company EightyLeo.

Similar to SpaceX’s Project Starlink, KLEO Connect aims to build a network of over 300 tiny, low-earth orbit satellites that will be completely operational by 2028 together with the base infrastructure to deliver global communications services.

The current discussion about the potential deployment of Starlink by the Ukrainian military in its defences against Russia’s invasion.

Elon Musk said last week that he turned down a request from the Ukrainian government to turn up his Starlink satellite network in the Crimean port city of Sevastopol last year in order to support an assault on the Russian fleet there because he feared being associated with a “major” act of war.

Germany has taken a more aggressive approach against China in recent months, with the administration of Chancellor Olaf Scholz issuing warnings about the need to lessen its strategic reliance on the Asian powerhouse.

Berlin rejected a Chinese investment in two local semiconductor firms in November after worries over national security and the transfer of critical technological information to Beijing were raised by the actions.

Despite opposition from a number of departments, the government approved COSCO (1199.HK), a state-owned shipping company in China, in May to purchase a portion of a container terminal located at the Hamburg port. According to insiders and media reports, the European Commission and the United States have also issued warnings against the long-anticipated agreement.

(With agency inputs)